We just have allowed an accretion of barriers over [time] – everything from marketing boards for agriculture, to restrictions on mobility of labour, to competing regulatory standards, to redundant regulatory standards. All of those discourage the free movement of goods, services and people in the country.
I was part of the government that brought in free trade back in 1988. If anybody had told me we would have free trade with the United States but wouldn’t have it within Canada, I never would have believed them. And now we are negotiating free trade with Europe. One of the issues [in those negotiations] is provincial and local procurement. Well, we had better address this within Canada as well, and ensure that we stop discriminating against ourselves.
What do you see as solutions? What’s the way to fix this?
The best progress in recent years was an agreement in western Canada [involving] Alberta, British Columbia and Saskatchewan. It has been an exceptionally complex and lengthy process for them, dealing with hundreds of different barriers they had to try to bring down. But that is just limited to three western provinces. We need to extend that sort of initiative across the country.
The first place to look is the AIT [Agreement on Internal Trade, established in 1995 by Ottawa and the provinces to reduce barriers]. But if we can’t make greater progress with the AIT, then we need to see the provinces themselves coming up with bilateral agreements that will take down the barriers. It is not the preferred route, because you would like to see a single market all through the country. But anything that can knock down barriers is desirable.
What are the problems with the AIT as it currently stands?
The real issue is, is there a mechanism that is enforceable, or does it rely on the goodwill of government? Citizens themselves should be able to challenge improper barriers, and to have a mechanism that will strike them down. We don’t have that.
Should the federal government take unilateral action to eliminate barriers?
I don’t think that is practical. The way governments have tried to deal with this is through collaboration.
Is the wine trade legislation an example of unilateral action by the federal government?
Parliament passed legislation but provincial liquor monopolies are still dragging their feet, so its application is still uneven across the country. In this instance it is less about protectionism – [the provincial monopolies] want to make sure they can squeeze every last bit of tax out of consumers. [While the federal government took the initiative], the provinces then have continued to fight a rear-guard action on it.
Thank heaven [the federal government] did it, but it hasn’t solved the problem. It has ameliorated it somewhat. And it has shamed some of the provinces, but not so much that they have changed their practices.
Is there enough political will among the provinces and Ottawa to get some of these barriers reduced?
The most significant leadership shown was in the agreement between Alberta and British Columbia initially, and then with Saskatchewan coming in. They recognized that all three of the provinces were losing out as a result of these barriers. We haven’t seen anything on that scale since then. There is progress [but] it is glacial.
What is the role of the business community on this issue?
The business community really has to lead on it. It can’t speak out of both sides of its mouth. The pressure for maintaining barriers to trade often comes from local businesses. People will talk about the virtues of competition in the abstract, but they may not like it in their particular case. It is important to be consistent on this, and recognize that an efficient economy requires competition. While there are winners and losers whenever there is competition, overall, the country benefits.
We need to ensure that the message is very clear: that we are opposed to interprovincial barriers to trade. We can’t argue one thing in the abstract and another thing here at home. We can’t say, I want to see the barriers brought down except in my case.